Direct Marketing Plan

MKT 321 Direct and Database Marketing

Professor: Marc Hsu

Team Members:Hsuan-Wen Huang (Sharon)

Pallavi Singla Tomasz Borys Zinah Al-Hilali

Zhi Zhang (Ricky)

Table of Content

A. Executive Summary & Introduction ---------------------------------------------------------------- 3B. Situation Analysis --------------------------------------------------------------------------------------- 4

Marketplace macro-environment Competitive situation Target group analysis Distribution channels Current product situation

C. Opportunity and Issues Analysis -------------------------------------------------------------------- 9 SWOT

D. Goals & Objectives ------------------------------------------------------------------------------------ 11E. Marketing Strategy ----------------------------------------------------------------------------------- 11F. Direct Marketing Tactics ---------------------------------------------------------------------------- 12

Channels & key tactics Total budget & CPA Key assets &support tools

G. Database Development ------------------------------------------------------------------------------ 24H. Implementation Timetable of the Program ----------------------------------------------------- 25I. Budgets and Financial Information ---------------------------------------------------------------- 26J. Evaluation Rules and Methods --------------------------------------------------------------------- 28K. References ---------------------------------------------------------------------------------------------- 29

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A. Executive Summary & Introduction

Introduction

Company background: Fitbit was introduced in 2008 by Eric Friedman and James Park

in San Francisco. It manufactures and provides wearable fitness-tracking devices

worldwide. Fitbit is a tracker of physical activities, it was designed to help people

become more active exercising, eat a healthier diet, and sleep better. Ultimately, it is

dedicated to help user lead a healthier lifestyle.

Product introduction : Fitbit produces both wristbands and portable clippable devices that

monitor users’ fitness activity by tracking the calories burned or distance moved. Its main

products include Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit ChargeHR, Fitbit

Surge, and some other devices and accessories related to fitness. Fitbit Zip is a wireless

tracker that allows the user to track data of daily activity (steps, distance, calories, active

time). Fitbit One is a clippable wireless tracker, which enables the user to track steps and

sleep. Fitbit Flex, Fitbit Charge and Charge HR are wristband trackers, which offer

similar monitor function as other Fitbit devices. Fitbit Surge adds GPS and heart rate

tracking function.

Partnerships : Fitbit builds its strategic partnerships with health care organizations, such as

United Healthcare and Virgin Health miles.

Executive Summary

Ftibit Inc. is one of the leading companies in the fitness trackers industry. Wearable

fitness trackers are gaining popularity and people are more interested in wearing them.

Especially people who are health conscious and like to measure their activity level.

Fitness trackers industry is expanding and many companies are offering similar products

to what Fitbit offers.

This direct marketing campaign aims to increase the sales of Fitbit’s trackers as well as

increasing the foot traffic to Fitbit.com. According to a Nielsen study, 54% of women

own fitness bands and 40% of them are between the ages of 25-40 years old. Therefore,

this would be a great target market. The campaign will use direct mail and digital

advertisements to target this segment. This direct marketing campaign will focus on

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increasing the sales of one of Fitbit’s trackers: Fitbit Charge. Overall the campaign

provides 5% discount on every purchase and the purchases happen only through

Fitbit.com.

The channels used include, emails, direct mails, contextual advertising, lookalike

advertising, facebook and twitter as the social media channels and retargeting etc. The

overall campaign comes out to be profitable except the social media channel Twitter.

Twitter, hence is not included in any of the results and will be kept only for testing

purposes. This campaign which runs for approximately 10 months will attract more than

2000 orders as per current estimation at a very nominal budget. If given a chance this

campaign will be extrapolated at a much higher budget to yield much better results.

B. Situation Analysis

Marketplace macro-environment

Consumer lifestyle has shifted to technology in recent years. Wearable electronic is a

trend now in the portable consumer electronic industry. According to Euromonitor

International (2014), wearable electronic devices will become a mainstream in the future.

The sales volume of passive wearable device, the device which has to connect with apps

to track all data, is increasing from almost 0 in 2012 to almost 60 million in 2015, and it

expects to grow to more than 120 million in sales volume in 2017. It means that even

though Fitbit Inc. has been increasing its business revenue since 2 years ago. it is still the

right timing for them to expand more by having a great marketing plan.

Competitive situation

Since portable consumer electronic goods have become more popular, many companies

started to make wearable products, such as Apple Watch, Nike+ FuelBand, Microsoft

band, Garmin, Jawbone, Moov, Misfit, and so on. However, Fitbit still has the biggest

market share in the wearable electronic market. Prospero (2014) mentioned that Fitbit

gained 3 percent of the market share last April. Additionally, Nike for Nike+ FuelBand is

going to focus on software more than hardware devices. Because the company did not

earn enough profit from its product. Therefore, Fitbit should stand its position in the

market and also keep improving or innovating all the products. For Fitbit Inc., there are

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lots of competitors in the wearable electronic market, but since Fitbit has its strong

market position, competitors are not the biggest threat for them. The article “One Third of

Wearable Device Wearers Ditching Them” (2014) says that 33% of consumers who

owned wearable electronic devices in the U.S. stopped using the product 6 month after

purchasing. It means that wearable products do not fully satisfy every customer.

Therefore, Fitbit should have a marketing plan which can promote the products, acquire

more customers, and also remind every consumer that the health electronic device is

better for long-term use.

Target group analysis

This direct marketing plan we aim at women whose age are around 25 to 35 and have

health conscious. According to Nielson (2014), 54% of women have owned fitness

bands, and 40% of them are in age 25 to 34. Also, 34% of people have income from 55k

to 99k a year. In other words, this target market will be the best target market for Fitbit to

explore for their products. The article “This Year’s Top New Year’s Resolution?

FITNESS!!” (Nielson, 2015a) shows that staying fit and healthy is the top new year’s

resolution. It is at 37% from the survey that they have made. The second resolution is

losing weight, and it is around 32%. It means that the marketing plan might focus on

those reasons to make people interested in the products from Fitbit. The other report from

Nielsen (2015b) states that more than half of women in the world think that they are

overweight, and 56% of women are trying to lose weight. Additionally, when think about

losing weight, women usually decide to diet rather than do physical exercise. To compare

men and women on the habit of health, around 77% of men like to do exercise and

women is 9% fewer than men. Even though men do exercise more than women, 68% is a

high number for women overall. Therefore, Fibit can focus on their product’s feature to

encourage women to track their health long-term with Fitbit’s products.

Distribution channels

Fitbit’s distribution channels included both online and offline store. Products are sold in

over 45,000 stores and in more than 50 countries. In addition to fitbit.com, trackers can

be purchased in stores or online from the following stores:

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Amazon At&t Best buy Brookstone

Dick’s Sporting Goods

Kohl’s Radioshack REI

Sports Authority Target Verizon Walmart

The above distribution channels do not fit in our direct marketing campaign. All of our

“call-to-actions” lead to a landing page on fitbit.com

Current product situation

Fitness wearables are gaining more popularity. Fitness trackers market grew over 150%

as around 7 million units were bought and shipped during the first quarter of 2015

(Charara 2015). Fitbit brand positioning is very good and the company has a leading

market position. According to The NPD Group, Fitbit trackers were the highest fitness

trackers sold in the U.S. in 2014. Share of The U.S. fitness activity trackers is 68%.

In today’s world, brands are on a race to push content digitally and interact with

consumers on multiple social media channels. Therefore, it is important to understand

how consumers perceive Fitbit based on their interactions with the brand on social media

channels. We used Rival IQ[1] tool to measure the social presence of Fitbit against its

main competitors – Garmin, Jawbone, Misfit Wearables, and Moov, Fitbit has the highest

number of social audience (Figure 1) and is the leader of Total Social engagement

(Figure 2). However, Garmin has the highest number of social activity (Figure 3).

[1] Digital marketing analytics tool with competitive analysis. Social media analytics, SEO keyword rankings and Website content marketing

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Figure 1 - Social Audience Comparison of Fitbit

Figure 2 - Social Engagement Comparison of Fitbit

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Figure 3 - Social Activity Comparison for Fitbit

Prices:

Fitbit’s trackers range from $59.95 up to $249.95.

Sales:

Fitbit is enjoying significant sales growth. According to the company’s SEC filings[2], the

company announced revenue of $745.4 million with a net income of $131.8. The number

of devices that Fitbit sold in 2014 was 10.9 million which is 142% increase than the

previous year which number of devices sold were 4.5 million (Figure 4) (Fitbit 2015)

[2] “An SEC filing is a financial statement or other formal document submitted to the U.S. Securities and Exchange Commission (SEC). Public companies, certain insiders, and broker-dealers are required to make regular SEC filings.” Wikipedia

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Figure 4

C. Opportunity and Issue Analysis

Strengths

Market leader:

Fitbit announced that it owned 70% market share in the fitness tracker industry, which

shows high level of awareness, reputation and credibility for the brand. Fitbit can take

advantage of that and launch direct marketing campaign and emphasize its popularity.

Partnership with wellness/ fitness organization:

Partnership with this organization increases the brand’s credibility. Also, referring to the

organization in the direct marketing campaign, the advertisements are more credible and

convincing.

Reasonable pricing:

Compared with other competitors, Fitbit products have a competitive advantage because

it offers lower prices of similar products while maintaining high quality. Price is one of

the most important factors while making purchasing decision. Therefore, emphasizing

price and value of Fitbit products in the direct marketing campaign, as well as

recommending different products to different target markets can be a good strategy.

Various Models:

Fitbit offers various device models, which enable the customers to choose the one that

match their needs. Also, each model has its special features for example: some models

come with LED screens and some others are capable of tracking sleep quality.

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Sleeping monitor:

Fitbit stands out from other similar trackers because, unlike other trackers, it monitors

sleep quality. This is attractive to customers that have issue with sleep.

Weaknesses

Lack of credibility of data:

Fitbit has its own way of calculating the calories burned, number of steps, the distance,

etc. Therefore, the data it collects might not be as accurate and reliable as data collected

from medical devices.

Opportunities

Healthier lifestyle trend:

Nowadays, more and more people are concerned about their health status. Therefore,

Fitbit can encourage people to get their own trackers by promoting healthier lifestyles

and helping them learn more about their bodies based on the data generated by the

trackers.

Social connection:

With the increasing popularity of using different social media channels, Fitbit can

encourage users to share their daily activity log on social media channels. This feature is

already included in the trackers’ software. This is an excellent opportunity that Fitbit can

use while promoting its products.

Medicine Platform:

Even though the data collected from Fitbit devices is not as accurate as the data collected

from professional medical facilities, it can still be helpful for users. Basically, the users

can monitor their bodies’ activity daily. Probably in the future, Fitbit database can be

used in the medical field especially that Fitbit has already established partnerships with

fitness organizations.

Threats

New technology/ competitors:

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The coming technology and new products threaten Fitbit market share. For example, the

designs of Nike Fuelband are appealing to customers. In addition, other brands are

gaining awareness quickly.

D. Goals & Objectives

Demand generation covers all targeted marketing activities that create awareness towards

our products, our company, content, and industry. Demand Generation includes a mix of

inbound and outbound strategies. It allows us to reach new markets, promote new

products and content, build consumer buzz, seek new customers, and re-engage and

retarget existing customers and engaged visitors. Direct Marketing is more than just

targeting users at the top of the funnel - it’s touching users throughout the conversion

optimization and sales cycles.

Background: Fitbit bleeds a strong brand in the industry, but is limited on how it creates

awareness and buzz for the female demographic. It’s a mixture of limited product reach,

educating organic and paid traffic, minimal impact in creating awareness and targeting profiles

and segments, and minimal efforts in boosting impact in the industry through created content and

PR.

Primary business objective: Increase the amount of ______ purchases by _____% in Q4 from Q3.

Secondary business objectives: Increase foot traffic to the site and landing pages by 10% by Q4.

Vision: After various tests and methodologies in Q3, have all selected marketing campaigns

optimized in driving traffic and conversions to Fitbit in Q4.

E. Marketing Strategy

Increase Demand and Leads Beyond Organic Reach:

Through a variety of PPC and internal campaigns, direct marketing, SEM, nurturing

campaigns, retargeting, and co-marketing partnerships, Fitbit will promote and drive

demand from specific points of the funnel.

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Promote Fitbit with Online Targeted Campaigns:

By utilizing various PPC channels, Fitbit will target profiles based off of keywords,

database, behavior, segmentation, and traits.

Promote Fitbit through Direct Mail:

By utilizing _______, Fitbit will target profiles based off of database traits (email,

geographic, age, etc).

Retarget Non-Converted Web Visitors:

For website visitors (and captured leads) that are engaging with our online portal, but not

yet converting, retargeting allows us run advertisements through web and social to

educate and promote our services to entice those visitors to convert.

F. Direct Marketing Tactics

Channels & Key Tactics:

a. SEM: When people search for a product, service, or information, they will utilize

search to obtain the necessary content. SEM allows us to promote websites to

receive maximum exposure that organic links wouldn’t be able to do otherwise.

SEM is split into two networks: Search and Display.

i. Search: Utilized to target branded and non-branded keywords, but

primarily focusing on the female demographic and female type search

terms. Ads appear in order dependent on bids and quality scores. On

average, search will receive approximately ______ impression per month.

AdWords will be optimized on a consistent basis to improve CTR, CPA,

and impressions and to reach and test new keywords. A group of

keywords to target would involve exercises for women, women’s fitness

wear, women’s health, workouts for women, women’s fitness clubs,

women’s muscle, etc.

Forecast

Budget Impressions/month CTR Clicks Conv% Purchases CPA

$10,000 700,000 0.4% 2,800 3% 84 $83.33

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ii. Display: Is utilized to run advertisements on websites through targeting

interests and topics. Display will be optimized on a consistent basis to

improve CTR, CPA, and impressions. Entering a few ideal keywords

regarding what our target is interested in, we can run display ads on

specific websites, such fitnessmagazine.com and freshworkouts.com by

excluding males and age groups.

Forecast

Spend Impressions CTR Clicks Conv% Purchases CPA

$10,000 4,000,000 0.1% 4,000 3% 120 $83.33

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b. Digital Advertising: To drive awareness outside of Fitbit’s organic reach,

advertising allows us to leverage and promote our brand by placing

advertisements on websites that are targeting specific profiles and behaviors.

Various platforms will be utilized throughout the year to drive interest and

awareness. Through testing a variety of these campaigns, the goal is to utilize a

couple of these channels to not only drive interest, but those that bring in strong

conversions and ROI.

i. PPC Advertising:

1. Contextual Advertising: Showing ads that are contextually relevant to

the context of the page that the prospect is on. System scans specific

keywords in an article or website, and returns advertisements that

appear on that specific article or website. Contextual advertising is a

form of targeted advertising in which the content of an ad is in direct

correlation to the content of the web page the user is viewing. As of

August, a $25k budgeted campaign is being invested into Xaxis

contextual advertising network through a 3-month window.

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Forecast

Impressions CTR Clicks Conv% Purchases CPA

9,090,909 0.1% 9,091 3% 136 $91.91

Impressions/Click Details

Publisher Methodology Objective Start Date

End Date Rate Type

Rate Quantity Budget

Contextual/Keyword Targeting

Posses greater control of brand association by dictating what content you surround

8/01/15 11/30/15 CPM $2.75 9,090,909 $12,500

2. Look-a-Like Advertising: Finding people who behave the same way

as your web visitors or customers, but who have not purchased your

product just yet. How does that work? Anonymously matching

prospects' cookies against the data-based characteristics of your web

visitors or customers. Classification could be across a range of

factors, including browsing activities, search activities, and datasets.

What emerges are ads that are served up to those prospects, delivering

customers that are similar and relevant to the current customer-base.

As of August, a $25k budgeted campaign is being invested into

Quantcast.

Forecast

Impressions CTR Clicks Trial Conv% Purchases CPA

7,462,686 0.12% 8,955 3% 134 $93.28

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Impressions/Click Details

Publisher Methodology Objective Start Date

End Date

Rate Type

Rate Quantity Budget

Look-a-Like Modelling

Locating new consumers that exhibit the same behavior as existing Fitbit’s female customers and visitors

6/15/15 7/31/15 CPM $3.35 7,462,686 $12,500

c. Social: Utilizing the available information per network, this will allow Fitbit to

target profiles or groups to communicate and generate interest towards our

product.

i. Twitter: Reaching and advertising twitter users to help build awareness.

Targeting can be based off of keywords, interests, followers, and

demographics. For this specific campaign, Fitbit will initially devote $10k

for targeting specific users that have similar interests to fitness related

accounts. Specific location will be limited to United States with only

targeting females. With bid of $3.25 per click, the estimated reach is 974k

out of 3 million. Total potential reach is 3 million.

Forecast

Budget users/month CPC Clicks Conv% Purchases CPA

$10,000 974,000 $3.25 3,077 1% 31 $322

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ii. Facebook: Advertising to specific profiles to help build interest for

specific campaigns. Targeting can be based off of numerous traits: age,

gender, demographic, job titles, likes, interests, etc. For this specific

Facebook campaign, Fitbit will also devote $10k for targeting users with

specific interests. Specific location will be limited to United States with

only targeting females. With bid of $0.75 per click, daily budget of

$1,000, the estimated reach is 150,00 - 400,000 users per day. Total

potential reach is 4.7 million.

Forecast

Budget users/month CPC Clicks Conv% Purchases CPA

$10,000 250,000 $0.75 13,333 1% 133 $75.19

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d. Retargeting: For web visitors that don’t convert in purchasing online, Fitbit will

retarget those visitors through web and social advertisements. The campaign is to

recapture and eventually convert those visitors by enticing them through

educational content. Some content are as follows:

i. Landing page with user submitted videos showing the benefits of Fitbit

ii. Landing page with health professional testimonials bringing to light the

health benefits of Fitbit.

Estimating the non-converted traffic through the campaigns we’ll be running and

the overall foot traffic Fitbit generates, we have the potential to retarget 1,000,000

visitors.

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Forecast

Budget Impressions/month CPM CTR Clicks Conv% Purchases CPA

$20,000 8,583,690 $2.33 0.4% 34,335 1% 343 $58.31

e. Direct Mail:

i. House list: Choose women from the house lists made by registering people

at various events. there are the people who have already shown some

interest in Fitbit. The only cost involved will be printing, creative and

posting as the lists are generated in house. The mail quantity will be 4000

and these will be sent out before the beginning of spring.

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Particulars Cost

Creative $300

Printing $150 CPM

Postage 25 cents per piece

Total cost $300 + ($150/1000*4000 + $.25*4000) = $1900

Media Quantity Frequency Impressions Total cost

CPM Response rate

Orders CPA

DM 4000 1 4000 1900 550 .020 80 27.50

ii. External lists: Buy lists from events such as Bay to Breakers run or Color

run which are attended by huge number of women. There are thousands of

people who register for these events and their information is accessible.

Also, these are the people who can be Fitbit's primary target as they are

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health conscious and it will be easier to convince them to track their

activity. Buy lists with addresses, name, zip code and gender. Send out

direct mails to them and track the response by adding a code to the mail.

The below ad will be mailed to the external lists and will be sent out to

10,000 women from the database. Here, we are targeting women who are

not just health conscious but are socially active and like to go out with

friends and have fun.

Particulars Cost

Base rate for list $85/M

Additional cost (Address, zip code, gender, name)

$ 20/M

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Login: fitbitmybff.com to BUY NOW and get 5% off a new

Fitbit charge

Hurry!! Limited time offer. Login and enter FIT2HEALTH

code

Total $105/M

Creative $300

Postage 25 cents per piece

Printing $150 CPM

Total cost $300 + ($105+$.25*1000+150)/1000*20,000

$10400

Media Quantity Frequency Impressions Total cost

CPM Response rate

Orders CPA

DM 20000 1 20000 10400

.535 .020 400 26.75

f. Email: Tie up with top five runs across the United States and this generates a

database of more than 300,000 people who are either health conscious or socially

active and spend a lot of time in activities with friends and family. Apart from

these runs, there are marathons in every city in The U.S. and we will gather a

database of 300,000 women through these five runs and other marathons’

database.

The following is the list of the runs and number of participants according to the data

available.

Run Location Participants in previous years

Bay to breakers San Francisco 110000

Lilac bloomsday Washington 61298

Peachtree road race Georgia 58000

Bolder boulder Colorado 54040

NYC marathon NYC 50740

Total 334078

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The emails will be sent out to them before the event starts and it will remind them to track

their activity level and how to be prepared for the run.

Particulars Cost

Number of emails : 300,000 $85/M

List CPM $ 73.67/M

Email blast $ 200

Creative $300

Total cost $300*9 + $200*9 + ($ 73.67)/1000*150,000

$26,600

Media Quantity Frequency Impressions Total CPM Response Orders CPA

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cost rate

Email 30,000 5 150,000 26,600 .09 .002 600 45.17

Total budget and CPA:

Budget Impressions/month Purchases CPA

Search 10,000.00 700,000.00 120.00 83.33

Display 10,000.00 4,000,000.00 120.00 83.33

Contextual 12,500.00 9,090,909.00 136.00 91.91

Lookalike 12,500.00 7,462,686.00 134.00 93.28

Facebook 10,000.00 250,000.00 133.00 75.19

Retargeting 20,000.00 8,583,690.00 343.00 58.31

DM 1,900.00 2,000.00 80.00 23.75

DM 10,400.00 10,000.00 400.00 26.00

Email 26,600.00 150,000.00 600.00 44.33

Total113,900.0

030,249,285.00 2066.00 44.48

Key assets & tools to support the project:

a. Kissmetrics

b. Google Analytics

c. Paid Dashboard (AdRoll, Adwords, Quantcast, Xaxis, [direct mail], etc)

d. SFDC (opportunity reporting)

e. Pardot List Building

G. Database Development

The following reports will be run weekly and shared with the team to give insight into what’s

working and what’s not.

Traffic Impressions: How is the traffic being develop on various channels

List of generated leads through unique landing pages: count of leads to see which

campaign is working more successfully than others

Trial conversions (entire funnel) through UTM parameters

CPA: for all the campaigns

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Conversion rates or impressions to clicks to purchases: for tracking different channels

Growth percentage from paid and organic activities (nurturing)

ROI monitoring: to check the profitability across channels and campaigns

Response rates of Direct mail: this will be followed by a test, once sure which one works

better , will be launched on a full scale.

CTR of emails

Which creative is generating more sales

Time of year and time of month and the day when the responses are higher: to see

seasonality of time of day when responses are higher.

H. Implementation Timetable of the Program

The goal of this direct marketing campaign is to increase the sales volume and foot traffic to

Fitbit’s official website and landing pages. In order to increase the number in Q4, we plan to

execute the campaign from March 2015 until the end of the year. The offers that we send are

going to tie up with relevant holiday seasons and relevant events. It will go through multiple

channels, such as Email, direct mail, social media, Google AdWords, and few other online

advertising tools.

Implementation timetable of plan

Channel/ Time Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec.

Email

Direct Mail

Facebook 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Twitter 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

AdWords

(SEM)

10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

XAXIS

(Contextual/Keyword Targeting)

Quantcast

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(look-a-like)

I. Budgets and Financial Information

Assumptions Campaign P&L

Unit price 123.5 Orders 2066

Shipping 5 Gross sales ($) 265481

Mail quantity 324,000 Returns ($) 7964.43

Response rate 0.014 Net sales ($) 257516.6

Return rate 3    

Average order size 1    

    COGS ($) 72310

Variable costs   Fulfillment ($) 7725.497

COGS 28% Bad debt ($) 5150.331

Fulfillment 3% Total Variable cost ($) 85185.83

Bad debt 2%    

Total 33% Total marketing cost ($) 113900

    Overhead ($) 1000

Fixed costs   Total fixed cost ($) 114900

Overhead 1,000    

Profit / Loss ($) 57430.74

*We have not included Twitter as that will just be run on a trial basis and we continue only if we

see initial success.

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Assumptions Campaign Customer Lifetime value

Unit price 123.5 Response rate 0.0 10.0 20.0

Shipping 5 Orders 2066.0 185.9 353.3

Mail quantity324,00

0 Starting customers 2066.0 1859.4 1766.4

Response rate 0.014 Retention rate 0.8 0.9 1.0

Return rate 3 Gross sales ($)265481.

0238932.

9226986.

3

Average order size 1 Returns ($) 7964.4 7168.0 6809.6

    Net sales ($)257516.

6231764.

9220176.

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Variable costs          

COGS 28% COGS ($) 72310 65079.0 61825.1

Fulfillment 3% Fulfillment ($) 7725.5 6952.9 6605.3

Bad debt 2% Bad debt ($) 5150.3 4635.3 4403.5

Total 33%Total Variable cost ($) 85185.8 76667.2 72833.9

           

Fixed costs  Total marketing cost ($) 113900 113900 113900

Overhead 1,000 Overhead ($) 1000 1000 1000

Total fixed cost ($) 114900 114900 114900

       

Profit / Loss ($) 57430.7 40197.7 32442.8

Discount rate 1.0 1.1 1.2

Net present value ($) 57430.7 40197.7 32442.8

Cumulative NPV ($) 57430.7 97628.4130071.

2

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Customer Lifetime value 27.8 47.3 63.0

J. Evaluation Rules and Methods

To evaluate this plan, we will track the increase in sales during this period for the Fitbit

Charge collection. We will count new purchase that happen while the direct marketing

campaign is running.

Also, we will check the click through rate of our various channels and put them against

the purchases made to see the actual conversion.

At the end, the plan has to be profitable throughout the channels. We will continuously

record the profitability of the channels and campaigns to see where to add investment and

where to reduce it.

We also look forward to people engaging with our app, so we wish to see more activity

level on the app as that will be somehow be translated as engagement.

If we see that people who own lower models and used the codes to upgrade to a higher

version, that will be an added achievement too and will be measured separately.

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K. Reference

Agomuoh, F. (2014, November 19). Fitbit Dominates The Wearables Market, But Can It Survive The Coming Onslaught Of Smart Watches? Retrieved http://www.ibtimes.com/fitbit-dominates-wearables-market-can-it-survive-coming-onslaught-smart-watches-1725780. 

Charara, S. (2015, May 22). If you own a fitness tracker, chances are it's a Fitbit. Retrieved from http://www.wareable.com/fitbit/fitness-tracker-sales-2015-fitbit-1169

Euromonitor International Unit. (2014, September). Consumer Electronics: Outlook, Trends, and Analysis. Retrieved from GMID database.

Fitbit (2015). Who We Are. Retrieved from the Fitbit, Inc. Retrieved from http://www.fitbit.com/about

Nielsen (2014, April 4). Hacking Health: How Consumers Use Smartphone and Wearable Tech to Track Their Health. Retrieved from http://www.nielsen.com/us/en/insights/news/2014/hacking-health-how-consumers-use-smartphones-and-wearable-tech-to-track-their-health.html

Nielsen. (2015a, January 8). This Year’s Top New Year’s Resolution? FITNESS!! Retrieved from http://www.nielsen.com/us/en/insights/news/2015/2015s-top-new-years-resolution-fitness.html

Nielsen. (2015b, March 19). Men’s and Women’s Wellness Perceptions Can Carry Weight. Retrieved from http://www.nielsen.com/us/en/insights/news/2015/mens-and-womens-wellness-perceptions-can-carry-weight.html

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